Vietnam hopes U.S. investment will grow faster
By Ho Binh Minh
HANOI (Reuters) – The opening of a $50 million hotel inmost countries attracts little attention. But an American hotelin Vietnam generates more interest than most given the twocountries’ troubled past.
After years of caution, diplomatic relations between theUnited States and Vietnam have warmed — most lately with thefirst visit to Washington by a Vietnamese leader since the warended 30 years ago — which Vietnam hopes will lead toincreased U.S. investment.
“We expect money from U.S. investors to rise, among others,in the near future, to move the U.S. up the rankings of thebiggest investors in Vietnam,” Phan Huu Thang, head of theplanning and investment ministry’s foreign investmentdepartment said.
The $48 million Park Hyatt Saigon opens for business nextweek and is the first investment in Vietnam by U.S.-basedGlobal Hyatt Corp., which is partly eyeing an expanding touristsector in the country. Vietnam says foreign visitors areexpected to increase 10 percent this year.
The trip last month by Vietnam’s Prime Minister Phan VanKhai to the United States has raised the profile of thecommunist country in the U.S. business community, said CarlThayer, a politics professor at the Australian Defense ForceAcademy.
“There is renewed American investor confidence in thiscountry,” he told the Vietnam Investment Review weekly.
Like other investors, the U.S. is looking at Vietnam’slarge potential consumer market and relatively youngpopulation, plus a cheap labor force, as its communist leaderspress to open the country’s borders to world trade by joiningthe WTO, possibly as soon as this year.
However, U.S. firms would have to deal with the downside ofdoing business in Vietnam, which foreign investors have saidinclude corruption, slow bureaucracy and high telecoms fees.
The United States is already Vietnam’s top trading partner.They did $6.4 billion in business last year, compared with just$450 million in 1995, the year diplomatic ties were restoredfollowing the war.
But the United States ranks only as Vietnam’s 11th biggestinvestor, although the leaders of both Vietnam and the U.S.promised last month to boost U.S. investment, behind Singapore,Taiwan and Japan.
In Washington, Khai witnessed the signing of a dealenabling U.S. insurers ACE INA International Holdings and NewYork Life International to set up wholly owned life insurancefirms in Vietnam.
In another deal signed during Khai’s visit, Motorola Inc.will sell telecoms equipment to eight Vietnamese provinces.
Deals signed during the visit totaled $1.4 billion, asignificant boost considering that as of June total pledgedinvestment in 2005 totaled $1.35 billion.
Among U.S.-funded projects pending approval are a $300million hotel in the southern province of Ba Ria-Vung Tau andan $800 million construction project to build a tourist andcommercial complex in the central region of the country, theVietnam News Agency said.
U.S. companies are most competitive in the service sectorsuch as banking and financial services, environment andtelecoms, officials said.
Deputy Finance Minister Le Thi Bang Tam told state-runVoice of Vietnam radio station on Tuesday the parliament willpass new laws late this year designed to speed up the time ittakes to set up companies and get investment licenses.